Stock split
In a stock split, a company divides its existing shares into a larger number. Your stake in the company remains exactly the same – only the denomination changes.
Example (Amazon 2022, 20:1 split):
• Before: 1 share at $2,800
• After: 20 shares at $140
• Total value: identical ($2,800)
Why do companies do this? To make the share affordable for small investors. More people buy an Apple share at $175 than at $700.
Well-known splits: Apple (4:1, 2020), Amazon (20:1, 2022), Tesla (3:1, 2022), Google/Alphabet (20:1, 2022).
For investors: a split changes nothing about the value of your investment. It's purely cosmetic – like changing a €50 note into five €10 notes.
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